Blockchain and the Law

Category Archives: Government

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U.S. House Continues to Explore Blockchain Regulation

Following up on their recent introduction of the Token Taxonomy Act, Representatives Darren Soto (D-FL) and Warren Davidson (R-OH) have teamed up again to introduce a new slate of bipartisan bills related to virtual currency. The two new bills, H.R. 922 and H.R. 923, were introduced on January 30, 2019 and are cosponsored by Representatives … Continue Reading

Guidance on Cryptoassets: UK Financial Conduct Authority Issues Consultation Paper

On January 23, 2019, the UK Financial Conduct Authority (“FCA”) issued its widely anticipated “Guidance on Cryptoassets” consultation paper CP19/3 (the “Consultation”). The Consultation followed the UK Cryptoassets Task Force’s publication last October, which set out the UK’s policy and regulatory approach to cryptoassets and distributed ledger technology and called for the FCA to issue … Continue Reading

A Taxonomy of the Proposed Token Taxonomy Act

On December 20, 2018, a bipartisan pair of Congressmen, Warren Davidson (R-OH) and Darren Soto (D-FL), introduced bill H.R. 7356 to enact the Token Taxonomy Act (the “Act”). The Act proposes several amendments to federal securities and tax laws that are intended to clarify how cryptoassets should be treated thereunder. Below, we discuss the key … Continue Reading

Wyoming Legislature Advances Blockchain-Related Bills

States have long been “laboratories of democracy” where policymakers can try out certain innovative policies on a local or regional level that could eventually, if successful, become national programs. On the tech side, some states have sought to establish themselves as laboratories of blockchain. For example, this past week Vermont announced that it will work … Continue Reading

Is Blockchain Technology Compatible with GDPR? French Data Protection Regulator Provides Guidance

Uncertainty regarding the compatibility of blockchain technology and the European Union’s General Data Protection Regulation (GDPR) has often been highlighted as a potential obstacle to the development and widespread implementation of blockchain systems involving personal data. To address tensions between blockchain technology and the GDPR, Commission Nationale de l’Informatique et des Libertés (CNIL), the French … Continue Reading

Ohio and California Join Other States in Passing Blockchain-Friendly Legislation

This past summer, Ohio adopted legislation (SB220) that primarily provides for a legal safe harbor from certain data-breach related tort claims to covered entities that implement a specified cybersecurity program that “reasonably conforms” to a recognized cybersecurity framework for the protection of personal information and “restricted information” or comply with certain industry-specific federal privacy laws. … Continue Reading

New York State Department of Financial Services Eases Backlog and Approves More BitLicense Applications

On June 14, 2018, the New York State Department of Financial Services (the “DFS”) announced that the agency granted a virtual currency license (or “BitLicense”) to bitcoin wallet and vault provider Xapo, Inc., and authorized the blockchain financial services company Paxos Trust Company LLC to expand their business to offer exchange and custodial services to … Continue Reading

SEC Director William Hinman: “Current offers and sales of Ether are not securities transactions”

At last week’s Yahoo! All Markets Summit in Palo Alto, SEC Division of Corporation Finance Director William Hinman delivered a speech sure to send shockwaves through the crypto world. Applying the Howey test (which sets forth the elements necessary for determining whether a transaction involves the offer or sale of an “investment contract” and thus, … Continue Reading

SEC Flexes Funny Bone in Fictional Token Offering

The Securities and Exchange Commission (the “SEC”) has taken to using humor and sarcasm to educate retail investors about the potential risks of purchasing tokens in initial coin offerings (“ICOs”). This week, the SEC issued a press release presenting “a hot investment opportunity.”  The release pointed to a website touting the HoweyCoin—a fictional crypto token … Continue Reading

Cryptoasset Exchanges Respond to New York Attorney General’s Virtual Markets Integrity Initiative

On April 17, 2018, the New York Attorney General’s Office (“OAG”) launched a Virtual Markets Integrity Initiative and sent letters to thirteen cryptoasset trading platforms requesting, through a questionnaire, disclosures on their operations, internal controls, and safeguards to protect customer assets.  The questionnaire focused on six major topic areas, including: 1) Ownership and Control, 2) … Continue Reading

When Filing Taxes, Don’t Forget Virtual Currency Income

In a March 23 news release, the IRS reminded taxpayers that income from virtual currency transactions must be reported on income tax returns, and that certain virtual currency transactions are taxable like any other property transactions. Taxpayers should note that despite the pseudo-anonymity of virtual currencies, the IRS has been able to successfully subpoena a … Continue Reading

SEC and CFTC Chairmen Testify before Senate on Cryptoasset Regulation

Last month, SEC chairman Jay Clayton and CFTC chairman Christopher Giancarlo testified before the Senate Banking Committee on their agencies’ regulatory efforts with respect to cryptoassets and ICOs. The written testimonies of chairmen Clayton and Giancarlo, as well as their verbal statements at the hearing itself, shed light on various issues including:  how tokens might … Continue Reading

New York State Department of Financial Services Issues Guidance to Virtual Currency Entities

On February 7, 2018, the New York State Department of Financial Services (“DFS”) issued guidance for all virtual currency entities licensed by New York State regarding the prevention of market manipulation, fraud, and other wrongdoing. According to DFS, New York has granted four licenses and two charters to virtual currency businesses to date. In its … Continue Reading

State-Level Legislation Anticipates Wide-Spread Business Use of Blockchain

On a daily basis, companies are announcing new developments on the adoption of blockchain in core business operations.  However, many of these use cases present unique legal issues.  In order to provide some clarity on some of these issues, and perhaps to offer a blockchain-friendly environment for the operation of blockchain companies, state legislatures around … Continue Reading

Colorado Senate Bill Proposes Utilizing Blockchain Technology to Improve State Government’s Operations and Cybersecurity

The Colorado Senate is considering a bill to utilize blockchain or other distributed ledger technology for a variety of purposes, including to improve the state government’s operations and cybersecurity. Senate Bill 18-086 (which was introduced on January 16, 2018) focuses on exploring a number of “transformative improvements” that distributed ledger technologies can offer to state … Continue Reading
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